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Cohn: How to save medicare while saving money

The media, doctors, hospitals and politicians have conspired to perpetuate the myth that more money can cure medicare&rsquo;s ills.

Vested interests erupt in fury when asked to make medical sacrifices. The government of Bill Davis learned that lesson when rationalizing hospitals in the late 1970s, writes Martin Regg Cohn.
(Bernard Weil / Toronto star file photo)

But here’s another fundamental truth: Canadians tune out bickering between Ottawa and the provinces faster than you can say medicare matters.

So I’m pleased to announce that today’s column is a federal-provincial-fiscal-free zone.

Let’s look instead at what really matters about medicare, a program for which Canadians never see a bill — yet quietly pay all the bills as taxpayers. With health care consuming about 42 per cent of program spending in Ontario — and an unhealthy percentage of economic output — medicare threatens to crowd out other pressing needs and productive investments.

All the moping about more money misses the point. The media, doctors, hospitals and opposition politicians have long conspired to perpetuate the myth that health care is starved of cash, that more money can cure medicare’s ills.

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The real challenge is value for money, not more money. Just because doctors and hospitals have done things a certain way for 40 years is no reason to perpetuate inefficiencies.

For all the flailing from Ontario Finance Minister Dwight Duncan about how Ottawa is imperiling medicare, he, too, is lowering the boom on hospitals in his bailiwick.

Next month, the treasurer will get some political cover from a commission engineering a massive overhaul of Ontario government services, headed by influential economist Don Drummond. Health care is at the top of the hit list.

After working on two recent studies of health-care inefficiencies, Drummond’s reform agenda is no secret: reintegrating the system; and reallocating more money to health promotion, community care, home care and long-term care.

But Drummond’s conceptual elegance won’t make Duncan’s political task any easier. Vested interests erupt in fury when asked to make medical sacrifices.

The Bill Davis government learned that lesson when rationalizing hospitals in the late 1970s, and then-premier Mike Harris repeated history two decades later. Now, Drummond and Duncan are trying to avoid their mistakes.

They are also looking at a far more painful and protracted restraint exercise, one that gets relatively little attention: In the early 1990s, Saskatchewan’s new NDP government faced a financial reckoning when credit rating agencies started downgrading the province’s debt.

Then-premier Roy Romanow resolved to close 52 hospitals and reopen them as well-being centres offering community-based care. He ignited a firestorm.

“It was very, very emotional — we had huge battles,” Romanow told me. “The people didn’t want it because they were used to the way the system operated.”

With no choice, Romanow plunged ahead even at the risk of alienating voters. Necessity, it turns out, was the mother of invention. The reforms took root. And he won re-election.

The lesson: To win the day, Premier Dalton McGuinty must also be prepared to muster political will — and risk defeat.

“If I had to give Dalton any advice,” Romanow muses, “you have to have the will and the determination to lose if you have to.”

But Romanow also offers this advice to his fellow New Democrats as the health-care debate heats up: You ignore Ontario’s debt load at your peril.

“If you’re a social democratic movement, you don’t want your decisions to be made by the bankers of New York or Toronto.”

Drummond has looked closely at the Saskatchewan experiment because it comes closest to a sustained transformation of government finances.

It’s a lesson Duncan has also heeded. The treasurer has taken to telling his fellow Liberals in caucus and cabinet that the prairie New Democrats pioneered an ambitious reform model — and provide an example of how good government can be rewarded by voters in the next election.

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